Opponents hit back on industry campaign to stop increases in Air Passenger Duty

Date added: July 6, 2012

AirportWatch has hit back at the aviation industry’s A Fair Tax on Flying campaign with its own Fair Tax on Flying campaign – suggesting that the £8 billion plus tax subsidy the aviation industry already enjoys must be reconsidered. The industry is lobbying for no further rises in Air Passenger Duty. Next week Virgin is expected to spearhead a new assault on APD. Public awareness is needed to counter the industry’s suggestions that APD is “unfair” and “too high” when the aviation industry is benefiting from tax breaks through paying no VAT or fuel duty, at a time when the Coalition Government is having to make drastic cuts to public services, to save money. The airline lobby’s new A Fair Tax on Flying website highlights ‘key facts’ convenient to their cause and glosses over others. AirportWatch shares the view of the industry campaign that there should be a “comprehensive study into the full economic effects of aviation tax in the UK” which the industry is calling for. The tax does indeed need to be fair.Tweet

4.7.2012

(AirportWatch)

AirportWatch, the national umbrella organisation opposing unsustainable airport expansion, has hit back at the aviation industry’s A Fair Tax on Flying campaign with its own Fair Tax on Flying campaign – suggesting that the £8 billion plus tax subsidy the aviation industry already enjoys must be reconsidered.

Next week Virgin is expected to spearhead a new assault on Air Passenger Duty.

John Stewart, Chair of AirportWatch, said, “Every summer as regular as Wimbledon or Henley, the aviation industry pops up with a campaign calling for an end to taxing people’s holidays. Every year the industry glosses over the considerable tax-breaks it enjoys through tax-free fuel and anexemption from VAT. Air Passenger Duty would need to rise four-fold to make up the difference.”

Air Passenger Duty was introduced by Kenneth Clarke when he was Chancellor in the early 1990s to beginto compensate the aviation industry’s non-payment of fuel duty and VAT.

AirportWatch says public awareness is needed to counter the industry’s suggestions that Air Passenger Duty is “unfair” and “too high” when the aviation industry is benefitting from tax breaks through paying no VAT or fuel duty, at a time when the Coalition Government is having to make drastic cuts to public services, to save money.

AirportWatch Communications Director Susan Pearson said:

“At a time when we are all tightening our belts, the aviation industry’s campaign to end or reduce Air Passenger Duty is distinctly unpalatable. Compared to road users, the aviation industry is saving itself £8 – 9 billion, which could be available to the public purse.

“We believe the aviation industry should be made to pay its fair share of the national tax burden.”

The airline lobby’s new A Fair Tax on Flying website wants there to be no rises in APD and highlights ‘key facts’ convenient to their cause. But, AirportWatch said, they are glossing over the inconvenient truth – that airlines pay no tax or VAT on aircraft fuel and no VAT on the purchase or servicing of aircraft, and no VAT is charged on airline tickets.

In contrast, road users pay both tax and VAT on petrol or diesel, and VAT on purchasing and servicing their vehicles, as well as vehicle excise duty which itself more than pays for the national roads infrastructure.

APD was instituted by The Treasury to begin to compensate the aviation industry’s non-payment of fuel duty and VAT.

AirportWatch shares the view of the industry campaign that there should be a “comprehensive study into the full economic effects of aviation tax in the UK” which the industry is calling for. It would be an opportunity to press those who advocate cutting APD to explain how they would make up the budgetary shortfall. Should we sack nurses, policemen or teachers? Should we cut welfare benefits to the poor? Or should we raise VAT and/or extend it to foodstuffs and children’s clothes.

That’s the debate that’s needed. Of course, if you raised APD – as we suggest – there would be the option of employing more nurses, policemen or teachers, or increasing welfare benefits/pensions, or reducing taxes, or a mixture thereof.

The difference between the lost revenue to the Treasury of £10-11 billion per year, and the tax take from APD is the figure by which aviation is effectively subsidised. i.e. £8 – 9 billion per year.

The Treasury has reiterated that APD is not an environmental tax. It was instituted in order to – in a small way – compensate for the aviation industry’s non-payment of fuel duty and VAT. This is on Page 10 of Treasury document “Reform of Air Passenger Duty: December 2011- response to consultation”

5]. AirportWatch is an umbrella movement uniting the national environmental organisations, airport community groups, and individuals opposed to unsustainable aviation expansion. Its members and supporters include the Aviation Environment Federation, Friends of the Earth, Greenpeace, the Campaign to Protect Rural England, the Campaign for Better Transport [formerly Transport 2000], the Woodland Trust, the World Development Movement, Environmental Protection UK, the National Trust and the Royal Society for the Protection of Birds – and many more.

The letter that the “A Fair Tax on Flying” is asking people to write to their MP is:

[Your address]

Xxxxxxx MP

House of Commons

London SW1A 0AA

[Today’s date]

Dear [name of MP],

FAIR TAX ON FLYING

I [live/work] in your constituency and would like to draw your attention to the Fair Tax on Flying campaign, which I wholeheartedly support (www.facebook.com/afairtaxonflying). I am writing to you to highlight the concerns facing many of your constituents who fly or enjoy a holiday each year and those employed in the travel and tourism industry.

(If you are a travel or tourism business owner, please include: [your company] employs [xxx] people in the local area and each year helps [xxx] of your constituents travel or go on holiday.)

Tourism is the fifth largest industry in theUKand employs millions of people, contributing billions to the Exchequer in taxes. Air Passenger Duty (APD) is having a detrimental impact on ordinary people’s ability to afford to visit friends and relatives or holiday abroad, and contributes to making theUKan unattractive destination for foreign visitors.

Please can you support the Fair Tax on Flying campaign’s call to halt any further rises in aviation tax. You may be aware that revenue from APD has increased by 2,600% since it was first introduced in 1994 and this year £2.2 billion of air travelers’ money will pour into the Treasury’s coffers. The Government has stated that it intends to raise the tax by a further £1.4 billion by 2015. This is particularly distressing as Government Ministers and the Department for Transport have stated that the aviation industry is meeting, and indeed exceeding, its environmental costs.

New figures from the CAA show that air passenger numbers in theUKhave decreased by 22% since 2007 and increasing aviation taxes further will see even less people being able to afford to fly. I am concerned that the rising level of taxation on flights is causing significant strain on hard-pressed family budgets and is hampering theUKeconomy’s growth.

(If you are a tourism business owner, please include: I would welcome the opportunity to discuss this with you and would like to invite you to visit [your company] to speak to members of my staff.)

I do hope you feel able to support this campaign and I look forward to hearing from you.